There are three common challenges that companies face today, as they grapple with increasingly complex supply networks, according to Margolis. One is globalization, the result of increased collaborations with customers and suppliers around the world, giving rise to a need for alternative sourcing strategies. A second is how to manage all of the information that is generated by that reality. And a third is how global companies can function as coherent organizations, even though critical information is scattered around the world.
Nevertheless, says Margolis, there are "tremendous opportunities" for improving the planning function. When information is assembled on a real-time basis, companies can view inventory levels, transfer items and reduce their dependence on expedited transportation through better planning.
Achieving supply-chain agility is more than a matter of good information technology. "It's really the triangle of people, processes and technology," Margolis says. Companies need to do a better job of combining forward-looking projections with backward-looking analyses.
"You can't drive by looking in your rear-view mirror," he says. "On the other hand, there's a lot of important information in history that you can't ignore. Pulling that together is an important challenge."
As product lifecycles shrink, a greater number of items lack the kind of sales history that traditionally guides companies in the creation of demand plans. Still, there is often a repeatable pattern as to how new products take off and fade away. In plotting demand for promotions and other retail activities, companies need to consider what is actually happening, along with what are the lifecycle patterns for similar products introduced in the past. In addition, says Margolis, they need to ensure that they have information systems in place that can adjust quickly to sudden changes in demand.
